Global TeleSystems Group (GTS) Message Board

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Technology Stocks : Global TeleSystems Group (GTS)

GTS 35.99

+1.0%

Jan 31 4:00 PM EST

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To: DD™ who wrote ()	8/21/1998 6:48:00 AM
From: Racso	Read Replies (1) of 73

GTSG: a Russian problem, not yet a European growth story (SELL). Despite enthusiastic broker reports, GTSG will severely suffer from the Russian crisis. The Europe growth story will not turn into net profit until 2001. 77% of revenues and almost 100% of operating cash flow comes from Russia. Russian operations are not exciting with flat/slowing growth rates and cellular subscribers dropping. Revenue growth rate was slowing even before the devaluation and the company has started to write down receivables. GTSG looks severely overpriced compared to other US listed companies doing business in Russia: it trades at 2.5X VIP (vs 1X in mid July),11.3x PLDI (vs 6 in mid July) and 10X ROS (vs 3X in mid July). Is that all? well, not quite. 18MM shares will come out of the lock-up period on Sep 30, that equals 33 days of trading. Finally, Montgomery Asset Mgt, which owns about 12% of the stock has announced it will reduce its position during the year. Any thoughts?

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